Spotlight: Bombardier On The Right Track?
Bombardier Inc., Canada’s largest aerospace company, seems to be on right track by winning several multi-million dollar contracts just couple of months after a U.S. trade agency rejected allegations that the Canadian company was receiving unfair state subsidies.
Montréal, Canada-based Bombardier, is one of the world’s leading manufacturers of airplanes, trains and public transport. Founded in 1942, Bombardier operates through its two divisions – Bombardier Aerospace and Bombardier Transportation.
On Tuesday, the company received an order from London for five additional Bombardier Aventra trains for services on the city’s Elizabeth line, which increases the total order to 70 trains. The additional contract is valued at about 73 million pounds or $104 million.
Bombardier Transportation also received a $262 million contract from Singapore’s Land Transport Authority to renew the ageing Bukit Panjang LRT system in four years.
The contract’s scope covers the supply of 19 new Bombardier Innovia APM 300 automated people mover cars, the retrofitting of 13 existing Bombardier Innovia APM 100 cars, as well as delivering a signaling system upgrade for 14 stops on the Bukit Panjang Light Rail Transit (LRT) Line.
Bombardier Transportation has also signed a five-year extension to its current contract with the Maryland Transit Administration to provide operations and maintenance services for the Brunswick and Camden Lines of the Maryland Area Regional Commuter Rail System. The contract extension is valued at about $288 million.
Meanwhile, Sweden’s Västra Götaland transport authority Västtrafik has selected Bombardier Transportation to supply 40 electric multiple-units for regional passenger services, worth about $460 million.
Last week, Bombardier also received a contract from the City of Phoenix for an extension to the PHX Sky Train automated people mover (APM) system at Phoenix Sky Harbor International Airport. The contract is valued at about $305 million.
Bombardier’s shares had recently pulled back after the company announced a plan to sell new shares in an effort to strengthen its balance sheet.
All-in-all, however, its been a good 2018. The stock ran up 30% through March as Bombardier ultimately won its trade dispute with U.S. plane rival Boeing.
Boeing had raised allegations against Bombardier that the company’s C-Series, which was sold to US airline Delta at low prices, was made possible by unfair subsidies from the British and Canadian governments.
The US Commercial department threatened to impose around 300% tariffs on Bombardier’s C-Series aircraft. However, the US International Trade Commission rejected the complaint.
The ITC ruled that Bombardier’s C- Series jets ordered by Delta did not compete with any of Boeing’s planes and the sale did not come at Delta’s expense.
Bombardier had invested heavily in the C-Series even upto the brink of bankruptcy, the threat of 300% tariffs would have been nail into its coffin. However, the ITC rescued the company by overturning the imposed duties and ruling that “Boeing lost no sales or revenues.”
Bombardier is currently in the middle of a five-year turnaround plan. Chief Executive Alain Bellemare said, in an earnings release, “As Bombardier approaches the midpoint of its turnaround plan, we are focused on unlocking the value of our past investments and restructuring actions to drive growth and create sustainable value for our shareholders, customers and employees.”
“We enter 2018 fully committed to achieving the goals we established in 2015, and our strong performance last year clearly demonstrates that we are on the right path,” he added.
by RTTNews Staff Writer
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